Acquiring a business through a stock purchase requires diligence and sound legal counsel. The mergers and acquisitions attorneys at the Watkins Firm have represented business owners and those purchasing an entity through many stock purchase transactions over our decades of service here in San Diego. The risks for the buyer in these transactions are genuine and numerous. Generally speaking, the seller wants to maximize the amount of cash they receive for their company and to walk away without any recourse as soon as possible. The buyer wants to ensure all of the representations of the seller are accurate, transparent and represent a full disclosure including all contingent liabilities. It is generally in the best interest of the buyer to have the seller to work through a “transition” period to ensure the transfer of Goodwill to new ownership and to protect existing customer and supplier relationships as the new owners take over.
How do stock purchase transactions work when the interests of the parties are so different? Our attorneys can help you to understand the successful and proven strategies which move you through the sale or acquisition of a company while accomplishing your goals and objectives.
Acquiring a business through a stock purchase requires diligence in many aspects of the transaction. Assets must be inspected to verify conditional readiness and clear title. The books should be thoroughly inspected by qualified accounting experts who can spot inconsistencies and the potential of over-cooked books or exaggerated claims. Reviewing tax returns for three years prior to the transaction as well as the books themselves can help to provide a sound insight into the financial strengths and challenges of the business you wish to acquire. The Watkins Firm also researches contingent liabilities, to protect our clients from unforeseen lawsuits down the road.
Ultimately, we fundamentally understand the nature of the “deal” and working to foster an atmosphere which is conducive to our client’s goals and objectives. We work to craft a sound stock purchase agreement which encapsulates the agreement between the parties themselves while facilitating a smooth transfer of ownership. We invite you to contact us or call 858-535-1511 for a free consultation if you are considering a corporate stock purchase in San Diego.